The Real Bubble May Be Corporate Profit Margins

I get a lot of questions about the financial markets and economy given my role here at Bloomberg Opinion. At the top of the list is reconciling the record-breaking stock market with soaring energy prices, wage growth that trails inflation and record-low consumer confidence.

Knowing that there are countless factors propelling markets higher and lower at any one time, the safe, defensible answer has been ever-expanding profit margins. In short, businesses have been turning every dollar of revenue into more earnings like never before. Now, if stocks keep rallying, I may need to find a different response.